How Trigger SIPs can affect your investment strategy

These may not be as effective unless the incremental capital invested is significant enough

- Akshat Rohatgi

A traditional systematic investment plan (SIP) comes with a fixed schedule and is known to be effective in mitigating market volatility by evenly distributing investment costs over market cycles. However, investors can miss out on opportunities that arise during market dips. Trigger SIPs address this concern and have since emerged as an alternative investment strategy.

Trigger SIPs offer investors the flexibility to time their investments— certain market conditions act as triggers that activate or deactivate investments. Many asset management companies offer investors two trigger options that activate either when the market rises or falls by a certain level. Some people use this strategy to get more value by investing more when the market is down.

In this article, we delve into the limitations of Trigger SIPs and why these may not always be the ideal investment strategy.

Popular triggers